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Improving student metrics suggests rising PBSA yields

3 MIN READAugust 02, 2019

According to a Q2 report on UK student housing by JLL, the student sector might out-perform some of the more established ones. 

Per the report, “Global investment across all real estate markets is expected to be significantly lower than 2018...However, the student sector proved its resilience in the last global financial crisis and since then has become a more established and mature sector in the UK.”

While true that all sectors must exercise degrees of caution in light of recent developments in British politics, JLL perceives the asset class possessing defensive and bearing ‘contra-cyclical’ characteristics. 

Current market activity 

There are over £500m of student housing assets currently under offer across London and Birmingham. Unite is the clear market leader - upon finishing their current £2.2bn acquisition of Liberty Living Portfolio, they control 24% of the PBSA market with ~74,000 beds. This acquisition would become the largest UK PBSA transaction in history. 

Future market activity 

Both the number of native and international students in the UK has almost doubled in the last twenty years, and is projected to grow as education becomes more accessible and encouraged in modern society. 

The recently independently published Augar review, which appeals to parliament on the current state of students and universities, called for a reduction of higher education feeds and reinstating maintenance grants - which got support from Theresa May, even though she said that they won’t “fall to [her], but the next Government”. 

These decisions would benefit the student population greatly, and perhaps allow student numbers to increase at an even faster rate. Of course subsequently equating to further demand for PBSA, improving occupancy rates and fuelling appetite for more development. 

Wider living investment market 

Much like student housing, other similar types of residential including coliving and senior living is also performing and showing resilience, despite investor cautions. JLL suggests that the sector is strengthened by positive structural and demographic changes that are less affected by economic or political factors than those currently negatively impacting the commercial real estate sector. 

JLL believe there will still be interest in the sector despite continued uncertainty. If some investors decide to hold back on decision making until the British political landscape has settled, it would suggest a rise in European student housing investment in the second half of 2019. However, the student housing yields are undoubtedly strengthening in both inner London and prime and secondary regional. 


For more information and further discussion on the current UK student housing market, Europe GRI takes place on 11-12 September in Paris, and GRI Residential Europe takes place on 26-27 November in London.

Article by Matt Harris

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